We’re all taught to save, save and save, especially if you come from a not-so-affluent background. But there’s a line to be drawn in the sand, a difference to be understood between mindless dissipation and exasperating parsimony.
That living a carefree life, at least financially, requires saving and planning doesn’t mean that you need to completely abstain from indulging in the various wonders the world has to offer.
This is counter-productive. Instead, a plan should be such that it allows you to partake in luxury, in the things which make life an enjoyable and memorable experience to you, while at the same time keeping you from being neck-deep in debt.
Doing this might seem difficult, but understanding the concept, taking proper steps towards it, and sticking to the plan never got anyone in trouble.
Choose Your Credit Card Wisely
You should understand and enjoy the perks of using a credit card for all your transactions. A credit card has multiple benefits, whether it comes to online shopping, hotel or resort booking, buying an expensive gift and more.
Additionally, you get reward points for each transaction. ICICI Amazon Pay Credit Card, Flipkart Axis Bank Credit Card and Standard Chartered DigiSmart Credit Card are few of the best credit card for online shopping.
And with the help of an app like CRED, you can use your credit card even more conveniently. Always take advantage of deals instead of foolishly spending more than the necessity.
In an intricately virtual world with instant validation, luxury has perhaps taken on an entirely new meaning. It’s taken on a more worldly, tangible sense than an idealistic one.
For some waking up next to a person you love meant luxury, for others it means travelling business class, having dinner reservations at the hottest new joint in town, chrome rims on car tires and so on. Mind you, both of these are valid.
The reason for understanding the meaning of luxury is the first step towards living luxuriously, even on a budget. Luxury is not what holds values in the world’s eyes, but it’s what you value.
Understanding that luxury is what you value the most yourself is a step towards planning your finances in such a reasonable manner that you can enjoy that thing, or hobby, or activity the most, while also saving in other less important areas of expenditure. In other words, prioritize your spending.
Save, Save, Save
These are the three words that you’ll have to live by to get the best of both the worlds unless you have a spectacular scheme that multiplies money exponentially in no time.
Think of this as an optimizing problem. You have to redistribute your resources at hand such that you have no problem paying utility bills but can also have that luxury vacation you always wished for.
For that, you’ll have to cut down on some costs, while collecting money for the desired product or experience. This may not be new knowledge, but it is definitely what people need to be reminded of.
Put the Saved Money to Use
Sometimes saving alone isn’t going to fund your desires. So what do you do? You invest. Put your money in the business of making money.
Could you keep it in a bank, for starters? Learn about financing opportunities and risks associated with them and take a prudent decision.
For taking prudent decisions regarding this, you need to go back to the first step: Understanding your needs. Only when you have a goal, can you plan towards achieving?
Worrying about how to reach the goal comes later. For instance, a person saving for a car might hold for a year or two and invest that money, or keep it in a savings account. But if you’ve your eyes on prime property, you’d have to save for a longer time, and perhaps choose a different strategy.
It’s imperative to be in the know of the various options one has at their disposal. This helps a lot in weighing your strategies by calculating the pace at which you’ll need to save, without scrimping for everything else.
SIPs and bonds are recommended for short-term, light needs, but long-term needs require a more stable investment, with higher returns, for instance, Provident Funds.
They lock in your money for 7-8 years but pay the highest risk-free rate in the country (use the ppf calculator to plan your savings).
Many luxurious items are bought with a special occasion in mind, but soon after that, they lose their appeal, often found biting the dust in a forgotten nook of the house. If that’s not a waste of money, what is?
To avoid such situations, you can rent out your luxurious items. There are multiple platforms where you can carry out the process in a hassle-free manner. If that is not preferable to you, then you can use the social media platform to engage with your followers and let them try out your luxurious items.
Keep A Track
It is important to keep track of things that you are doing. This primarily includes your expenditures.
While luxury is a treat that you gift yourself or your loved ones, it should not come at the cost of your savings or investment. So it is extremely crucial to watch out where you are spending and on what you are spending.
Ideally, you should plan out everything and be wise enough while you are investing in an asset and no doubt, luxury is one of the biggest investments. Keep track of your spending, and it will help you to make the right calculation and make you aware of your finances.
To Sum Up
You deserve to treat yourself in the best way possible after all the hustle that you do. Also, know how you can pay off your debts through the debt payoff calculator. But at the same time, you should take care of your finances, invest wisely for your future and spend on things that add value. Luxury feels even more meaningful when you do it wisely.